San Antonio, Texas, December 23, 2025
Starting January 1, 2026, Texas will implement several new laws affecting taxation, technology, education, and healthcare. Key changes include an overhaul of research and development tax credits, new regulations for artificial intelligence, and requirements for public schools to display the Ten Commandments. These legislative changes aim to stimulate economic growth and enhance public policy while maintaining social and ethical standards.
New Texas Laws Set to Take Effect on January 1, 2026
San Antonio, Texas – As of January 1, 2026, several new laws will be implemented across Texas, impacting various sectors including taxation, technology, education, and healthcare. Below is an overview of the key legislative changes:
Taxation and Economic Development
- Research and Development Tax Credit Overhaul: Senate Bill 2206 repeals the existing sales and use tax exemption for research and development activities. In its place, a more generous franchise tax credit is introduced, offering a credit of 8.722% of the difference between current period qualified research expenses and 50% of the average qualified research expenses from the prior three periods. This credit is also extended indefinitely, replacing the previous expiration date at the end of 2026.
- Property Tax Exemption for Business Inventory: House Bill 9 exempts up to $125,000 of business inventory from taxation by all entities, including counties, cities, and school districts. This exemption aims to provide relief to businesses and stimulate economic growth.
Technology and Artificial Intelligence
- Artificial Intelligence Regulation: House Bill 149, known as the Texas Responsible Artificial Intelligence Governance Act, establishes guidelines for the development and deployment of AI systems within the state. The act applies to any entity conducting business in Texas or developing AI systems for use by Texas residents. It prohibits AI systems from unlawfully and intentionally discriminating against individuals based on protected classes, including race, color, national origin, sex, age, religion, or disability.
- App Store Age Verification: Senate Bill 2420 requires app stores and app developers to verify users’ age categories. For users under 18, parental or guardian consent is mandatory before downloading apps or making in-app purchases. This law aims to enhance online safety for minors.
Education and Public Policy
- Display of the Ten Commandments in Schools: Senate Bill 10 mandates that all public schools in Texas display the Ten Commandments in a clearly visible location within classrooms. This law reflects the state’s emphasis on religious expression in educational settings.
- Restrictions on Diversity, Equity, and Inclusion (DEI) Initiatives: Senate Bill 12 imposes limitations on DEI programs in K-12 public and open-enrollment charter schools. The law prohibits instruction on sexual orientation and gender identity and bans student clubs based on these topics. It also requires parental consent before providing healthcare services to students and prohibits teachers from promoting “social transitioning” of students.
Healthcare and Medical Privacy
- Electronic Health Record Storage and Parental Access: Senate Bill 1188 establishes requirements for electronic health record storage, artificial intelligence disclosure, and parental access to minor medical records. Healthcare practitioners must inform patients when AI tools are used in diagnosis or treatment and provide parents and guardians with complete and unrestricted access to their minor children’s electronic health records.
Criminal Justice
- Obscene Visual Material Depicting Children: Senate Bill 20 creates new criminal offenses for possessing, promoting, or viewing visual material deemed obscene that appears to depict a child under 18. This includes actual persons, animated or cartoon depictions, or images created through computer software or artificial intelligence.
These legislative changes reflect Texas’s ongoing efforts to address emerging challenges and opportunities across various sectors. Residents and businesses are encouraged to familiarize themselves with these new laws to ensure compliance and take advantage of the benefits they offer.
Frequently Asked Questions (FAQ)
What is Senate Bill 2206 about?
Senate Bill 2206 repeals the existing sales and use tax exemption for research and development activities and introduces a more generous franchise tax credit. This credit is 8.722% of the difference between current period qualified research expenses and 50% of the average qualified research expenses from the prior three periods. The credit is also extended indefinitely, replacing the previous expiration date at the end of 2026.
What does House Bill 9 entail?
House Bill 9 exempts up to $125,000 of business inventory from taxation by all entities, including counties, cities, and school districts. This exemption aims to provide relief to businesses and stimulate economic growth.
What is the Texas Responsible Artificial Intelligence Governance Act?
House Bill 149, known as the Texas Responsible Artificial Intelligence Governance Act, establishes guidelines for the development and deployment of AI systems within the state. The act applies to any entity conducting business in Texas or developing AI systems for use by Texas residents. It prohibits AI systems from unlawfully and intentionally discriminating against individuals based on protected classes, including race, color, national origin, sex, age, religion, or disability.
What does Senate Bill 10 require?
Senate Bill 10 mandates that all public schools in Texas display the Ten Commandments in a clearly visible location within classrooms. This law reflects the state’s emphasis on religious expression in educational settings.
What does Senate Bill 12 address?
Senate Bill 12 imposes limitations on diversity, equity, and inclusion programs in K-12 public and open-enrollment charter schools. The law prohibits instruction on sexual orientation and gender identity and bans student clubs based on these topics. It also requires parental consent before providing healthcare services to students and prohibits teachers from promoting “social transitioning” of students.
What does Senate Bill 1188 establish?
Senate Bill 1188 establishes requirements for electronic health record storage, artificial intelligence disclosure, and parental access to minor medical records. Healthcare practitioners must inform patients when AI tools are used in diagnosis or treatment and provide parents and guardians with complete and unrestricted access to their minor children’s electronic health records.
What does Senate Bill 20 address?
Senate Bill 20 creates new criminal offenses for possessing, promoting, or viewing visual material deemed obscene that appears to depict a child under 18. This includes actual persons, animated or cartoon depictions, or images created through computer software or artificial intelligence.
Key Features of the New Texas Laws Effective January 1, 2026
| Law | Description |
|---|---|
| Senate Bill 2206 | Overhauls research and development tax credits, replacing sales and use tax exemptions with a more generous franchise tax credit. |
| House Bill 9 | Exempts up to $125,000 of business inventory from taxation by all entities, including counties, cities, and school districts. |
| House Bill 149 | Establishes guidelines for the development and deployment of AI systems, prohibiting unlawful discrimination based on protected classes. |
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